Question 1

In the actual economy,households

Accepted Answer

A)   spend all of their income.
B)   divide their income among spending,taxes,and saving.
C)   buy all goods and services produced in the economy.
D)   Both (a) and (c) are correct.E) A) and B)
F) A) and C)

Question 2

The information below for 2008 in millions was reported by the World Bank.On the basis of this information,which list below contains the correct ordering of GDP per person from highest to lowest? Country
GDP (Constant US$) 
GDP(Current US$) 
Population
Argentina
$394,595
$328,465
39) 88
Bolivia
$11,373
$16,674
9) 69
Peru
$84,241
$129,109
28) 84

Accepted Answer

A)   Argentina,Bolivia,Peru
B)   Argentina,Peru,Bolivia
C)   Bolivia,Argentina,Peru
D)   Peru,Bolivia,ArgentinaE) None of the above
F) B) and D)

Question 3

Table 15-4
The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008.
Prices and Quantities
 
-Refer to Table 15-4.This country's inflation rate from 2009 to 2010 was

Accepted Answer

A)   16.4%.
B)   24.3%.
C)   41.0%.
D)   44.7%.E) B) and C)
F) B) and D)

Question 4

Which of the following examples of production of goods and services would be included in U.S.GDP?

Accepted Answer

A)   Samantha,a Canadian citizen,grows sweet corn in Minnesota and sells it to a grocery store in Canada.
B)   Ian,an American citizen,grows peaches for his family in the back yard of their Atlanta home.
C)   Leo,an American citizen,grows marijuana in his Seattle home and sells it to his friends and neighbors.
D)   None of the above examples of production would be included in U.S.GDP.E) B) and D)
F) C) and D)

Question 5

Which government entity computes U.S.GDP every three months?

Accepted Answer

A)   the Council of Economic Advisers
B)   the Department of Commerce
C)   the Department of Treasury
D)   the Federal ReserveE) A) and B)
F) None of the above

Question 6

Foreign citizens earn more income in Ireland than Irish citizens earn in foreign countries.

Accepted Answer

A)   Ireland's net factor payments from abroad are positive,and its GDP is larger than its GNP.
B)   Ireland's net factor payments from abroad are positive,and its GNP is larger than its GDP.
C)   Ireland's net factor payments from abroad are negative,and its GDP is larger than its GNP.
D)   Ireland's net factor payments from abroad are negative,and its GNP is larger than its GDP.E) A) and B)
F) C) and D)

Question 7

Which of the following domestically produced items is not included in GDP?

Accepted Answer

A)   a bottle of shampoo
B)   a hairdryer
C)   a haircut
D)   All of the above are included in GDP.E) A) and B)
F) A) and C)

Question 8

Table 15-4
The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008.
Prices and Quantities
 
-Refer to Table 15-4.In 2010,this country's

Accepted Answer

A)   real GDP was $780,and the GDP deflator was 141.0.
B)   real GDP was $825,and the GDP deflator was 133.3.
C)   real GDP was $780,and the GDP deflator was 133.3
D)   real GDP was $825,and the GDP deflator was 141.0E) A) and C)
F) None of the above

Question 9

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

Accepted Answer

A)   raises GDP.
B)   decreases GDP.
C)   doesn't change GDP because gambling is never included in GDP.
D)   doesn't change GDP because in either case his income is included.E) All of the above
F) A) and D)

Question 10

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator ?

Accepted Answer

A)   25
B)   40
C)   250
D)   400E) A) and D)
F) All of the above

Question 11

Which of the following subcomponents of GDP can be either positive or negative?

Accepted Answer

A)   inventory investment
B)   exports
C)   government purchases
D)   All of the above are correct.E) A) and C)
F) A) and D)

Question 12

JR sells RV's.In 2010 she added $400,000 to her inventory.$100,000 of this addition was from used RV's she purchased while the remaining $300,000 was from her purchases of newly manufactured RV's.How much of JR's inventory is included in 2010 GDP?

Accepted Answer

A)   $0
B)   $100,000
C)   $300,000
D)   $400,000E) None of the above
F) A) and B)

Question 13

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 14

Table 15-4
The table below reports nominal and real GDP for the U.S.from 1929 to 1932.
 
-Refer to Table 15-3.What is the GDP deflator and the inflation rate for 1932?

Accepted Answer

A)   8.09,-11.7
B)   8.09.16,-13.3
C)   1236.46,11.7
D)   1236.46,13.3E) B) and C)
F) All of the above

Question 15

George lived in a home that was newly constructed in 2005 for which he paid $200,000.In 2008 he sold the house for $225,000.Which of the following statements is correct regarding the sale of the house?

Accepted Answer

A)   The 2008 sale increased 2008 GDP by $225,000 and had no effect on 2005 GDP.
B)   The 2008 sale increased 2008 GDP by $25,000 and had no effect on 2005 GDP.
C)   The 2008 sale increased 2008 GDP by $225,000; furthermore,the 2008 sale caused 2005 GDP to be revised upward by $25,000.
D)   The 2008 sale affected neither 2008 GDP nor 2005 GDP.E) B) and C)
F) None of the above

Question 16

GDP is not a perfect measure of well-being; for example,

Accepted Answer

A)   GDP incorporates a large number of non-market goods and services that are of little value to society.
B)   GDP places too much emphasis on the value of leisure.
C)   GDP fails to account for the quality of the environment.
D)   All of the above are correct.E) A) and C)
F) B) and D)

Question 17

A recession is always associated with

Accepted Answer

A)   the end of a war.
B)   slowly growing real GDP.
C)   rising inflation.
D)   declining real GDP.E) A) and B)
F) B) and D)

Question 18

The Carters' oldest son attends Big State University.He and his parents pay all his fees and tuition.These payments count in GDP as

Accepted Answer

A)   investment.
B)   government spending.
C)   consumption of services.
D)   consumption of durable goods.E) C) and D)
F) B) and D)

Question 19

Table 15-7
The table below contains data for the country of Togogo.The base year is 1974.
 
-Refer to Table 15-7.From 1976 to 1977,

Accepted Answer

A)   inflation was 33.3% and output grew at a rate of 20%.
B)   inflation was 33.3% and output grew at a rate of 60%.
C)   inflation was 50% and output grew at a rate of 20%.
D)   inflation was 50% and output grew at a rate of 60%.E) B) and D)
F) C) and D)

Question 20

A movie company makes 500,000 DVDs of one of its latest releases.It sells 300,000 of them before the end of the second quarter,and holds the others in its warehouse.How will the 200,000 unsold DVDs be treated in the GDP statistics?

Accepted Answer

A)   Since the DVDs eventually will be bought by consumers,they will be included as consumption in the second quarter.
B)   Since the DVDs were not purchased in the second quarter,they will be counted as an increase in third-quarter GDP.
C)   The DVDs will be counted as a change in inventory in the second quarter and so will be included in second-quarter GDP.
D)   The DVDs will be counted as a change in inventory in the second quarter,and when sold in the third quarter will raise third-quarter GDP.E) B) and C)
F) A) and D)

Exam 15: Measuring a Nations Income

Table 15-4 The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008. Prices and Quantities -Refer to Table 15-4.In 2010,this country's

Correct Answer
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Table 15-4 The table below reports nominal and real GDP for the U.S.from 1929 to 1932. -Refer to Table 15-3.What is the GDP deflator and the inflation rate for 1932?

Correct Answer
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Table 15-4 The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008. Prices and Quantities -Refer to Table 15-4.This country's inflation rate from 2009 to 2010 was

Correct Answer
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Table 15-7 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 15-7.From 1976 to 1977,

Correct Answer
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Correct Answer
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If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator ?

Correct Answer
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Which of the following examples of production of goods and services would be included in U.S.GDP?

Correct Answer
verified

JR sells RV's.In 2010 she added $400,000 to her inventory.$100,000 of this addition was from used RV's she purchased while the remaining $300,000 was from her purchases of newly manufactured RV's.How much of JR's inventory is included in 2010 GDP?

Correct Answer
verified

In the actual economy,households

Correct Answer
verified

The Carters' oldest son attends Big State University.He and his parents pay all his fees and tuition.These payments count in GDP as

Correct Answer
verified

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

Correct Answer
verified

A movie company makes 500,000 DVDs of one of its latest releases.It sells 300,000 of them before the end of the second quarter,and holds the others in its warehouse.How will the 200,000 unsold DVDs be treated in the GDP statistics?

Correct Answer
verified

GDP is not a perfect measure of well-being; for example,

Correct Answer
verified

George lived in a home that was newly constructed in 2005 for which he paid $200,000.In 2008 he sold the house for $225,000.Which of the following statements is correct regarding the sale of the house?

Correct Answer
verified

Which of the following subcomponents of GDP can be either positive or negative?

Correct Answer
verified

Which government entity computes U.S.GDP every three months?

Correct Answer
verified

Foreign citizens earn more income in Ireland than Irish citizens earn in foreign countries.

Correct Answer
verified

Which of the following domestically produced items is not included in GDP?

Correct Answer
verified

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct Answer
verified

A recession is always associated with

Correct Answer
verified

Exam 15: Measuring a Nations Income

Table 15-4 The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008. Prices and Quantities -Refer to Table 15-4.In 2010,this country's

Correct AnswerverifiedShow Answer

Table 15-4 The table below reports nominal and real GDP for the U.S.from 1929 to 1932. -Refer to Table 15-3.What is the GDP deflator and the inflation rate for 1932?

Correct AnswerverifiedShow Answer

Table 15-4 The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008. Prices and Quantities -Refer to Table 15-4.This country's inflation rate from 2009 to 2010 was

Correct AnswerverifiedShow Answer

Table 15-7 The table below contains data for the country of Togogo.The base year is 1974. -Refer to Table 15-7.From 1976 to 1977,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator ?

Correct AnswerverifiedShow Answer

Which of the following examples of production of goods and services would be included in U.S.GDP?

Correct AnswerverifiedShow Answer

JR sells RV's.In 2010 she added $400,000 to her inventory.$100,000 of this addition was from used RV's she purchased while the remaining $300,000 was from her purchases of newly manufactured RV's.How much of JR's inventory is included in 2010 GDP?

Correct AnswerverifiedShow Answer

In the actual economy,households

Correct AnswerverifiedShow Answer

The Carters' oldest son attends Big State University.He and his parents pay all his fees and tuition.These payments count in GDP as

Correct AnswerverifiedShow Answer

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

Correct AnswerverifiedShow Answer

A movie company makes 500,000 DVDs of one of its latest releases.It sells 300,000 of them before the end of the second quarter,and holds the others in its warehouse.How will the 200,000 unsold DVDs be treated in the GDP statistics?

Correct AnswerverifiedShow Answer

GDP is not a perfect measure of well-being; for example,

Correct AnswerverifiedShow Answer

George lived in a home that was newly constructed in 2005 for which he paid $200,000.In 2008 he sold the house for $225,000.Which of the following statements is correct regarding the sale of the house?

Correct AnswerverifiedShow Answer

Which of the following subcomponents of GDP can be either positive or negative?

Correct AnswerverifiedShow Answer

Which government entity computes U.S.GDP every three months?

Correct AnswerverifiedShow Answer

Foreign citizens earn more income in Ireland than Irish citizens earn in foreign countries.

Correct AnswerverifiedShow Answer

Which of the following domestically produced items is not included in GDP?

Correct AnswerverifiedShow Answer

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct AnswerverifiedShow Answer

A recession is always associated with

Correct AnswerverifiedShow Answer

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